Whatever the outcome of the final report, due at the end of the year, there is little doubt that the review of the civil justice costs regime being conducted by Lord Justice Jackson will transform many aspects of civil litigation. It may permanently change the way that many claims, and which types of case, proceed.
The interim report, published on 8 May, provides few clues as to what Jackson’s final recommendations will be but, while it seems unlikely that Jackson will take the nuclear option and abolish recoverability altogether, what is being considered is pretty radical. Significant attention is paid to how conditional fee agreements and after-the-event insurance operate and there is also likely to be a greater emphasis on the proportionality of costs against the size of claims.
One of the options outlined by Jackson is the introduction of a fixed-costs regime, on similar lines to that used in Germany, for a broad range of cases, while his interim report is broadly in favour of encouraging the wider take-up of before-the-event legal expenses insurance.
Perhaps most controversially, Jackson is also rumoured to favour the introduction of contingency fees in England and Wales for the first time, although the interim report gives nothing away in this area.
Although, in theory, the Jackson review will cover the full gamut of civil litigation, much of the impetus for changes to the costs regime has come from the insurance industry, which feels as if it is shouldering an unfair proportion of the bill for access to justice, and the public sector, which has been complaining that the cost of settling legal claims has become a burden on the public purse. As a result, the primary focus of Jackson’s review is on the low-value, high-volume end of the spectrum. The question is: will the report also have a wider effect on civil litigation and significantly change the costs regime for high-value, complex litigation too? Jackson has stated that his review will affect all levels of civil litigation; however, he has also indicated in the interim report that he does not plan to adopt a ‘one-size-fits-all’ approach to his final recommendations.
The bulk of the rule changes that come from the Jackson review are unlikely to be aimed at high-value cases, so, in the immediate future, complex litigation is unlikely to be significantly affected. In particular, it seems likely that if Jackson does recommend the introduction of contingency fees, this will be in a very limited form and aimed at the promotion of sensible group actions rather than creating a free-for-all that could enable the development of a US-style litigation culture.
There may, however, be some spillover of these changes to high-value litigation, if the courts are encouraged to apply Jackson’s principles more widely and to look more harshly at costs in general.
The Commercial Court Users Committee (CCUC) is investigating whether, contrary to the views expressed by Lord Justice Jackson, a one-size-fits-all approach to costs should be applied across the board in civil litigation. The CCUC has set up a sub-committee in response to Jackson’s review, and is asking whether potential procedural changes to litigation should apply to complex, multi-party disputes in the higher courts as well as to commoditised cases in the lower courts.
Moreover, judges already have significant powers within the existing procedure rules to better keep costs under control, but have so far been reluctant to use them. So, while high-value litigation looks set to be spared the brunt of Jackson’s recommendations, whether the review will create a permanent culture change in the mid-to-long run remains to be seen.
Peter Smith is managing director of FirstAssist Legal Protection